Cambodia: local rules

Article 18 of the Law on Taxation (Royal Kram NS/RKM/0523/004 of 16 May 2023) lets the tax administration share gross income, deductions and other benefits among related enterprises, in Cambodia or abroad, to stop tax avoidance or to show their income clearly. Enterprises are related if one person owns 20% or more of the value or equity of each (Art. 18(2)). The detailed rules are in Prakas 574 MEF.Prk.GDT of 19 September 2024 on income and expense allocation among related parties, in force from 1 January 2025. It replaced Prakas 986 MEF.BK of 10 October 2017, which the request named. Article 4 of Prakas 574 requires the arm's length principle for all dealings between related persons, and Article 18 applies the same idea to profits of a Cambodian permanent establishment of a non-resident.

A taxpayer with related party dealings must keep records for 10 years and prepare transfer pricing documentation every year: group and taxpayer information, the controlled transactions, and the pricing method (Prakas 574 Art. 17(1) and (2)). The annual tax on income return must carry related party information, and the documents are handed over when the tax administration asks (Art. 17(3)). The documents are excused for a year if turnover is below KHR 8bn, total assets are below KHR 4bn, and related party dealings other than loans are below KHR 1bn (Art. 17(7)). Related party loans have separate exemptions (Art. 17(5) and (6)), and last year's documents can be reused if nothing important changed, with comparables updated each year (Art. 17(4)). Cambodia has no master file and no country-by-country report in the Law on Taxation or Prakas 574. The 30 day time to hand over documents is read from Art. 202(3) of the Law on Taxation, because Prakas 574 says only on request.

Prakas 574 Article 8 allows five methods: comparable uncontrolled price, resale price, cost plus, transactional net margin and profit split. The taxpayer picks one or more and must explain the choice, and the tax administration can direct which method to use. Comparability looks at contract terms, functions, assets and risks, the product or service, economic conditions and business strategy (Art. 6). Prices inside the arm's length range are not adjusted, and a result outside it is moved to the median, but only where that does not reduce or lose tax (Art. 7). Intangibles follow the DEMPE approach (Arts. 14 and 15). Intra-group services must be real and give a direct benefit (Art. 16, from a secondary summary).

Under Prakas 574 Article 19, not following the Article 17 duties can lead to the tax compliance certificate being withdrawn or the taxpayer's compliance rating being reviewed, plus the administrative penalties in Article 235 of the Law on Taxation. Article 235 sets a cash penalty of KHR 5m for a person who keeps committing offences such as not filing a return after more than two written warnings, and KHR 10m for offences such as not giving information on request or not keeping records. Where a transfer pricing adjustment raises tax, Article 233 adds 10% of the unpaid tax for negligence, 25% for serious negligence and 40% for a one-sided assessment, plus interest of 1.5% a month. Where needed, the administration can build a criminal case under Articles 242 and 243 of the Law on Taxation.

Nothing is enacted. No Cambodian law or prakas for a global minimum tax, qualified domestic minimum top-up tax or income inclusion rule was found, and no filing deadline exists. The Law on Taxation has its own 1% minimum tax on turnover, which is not a Pillar Two tax. Deloitte's 2025 Cambodia highlights say Cambodia has not committed to GloBE rules, and a check on 27 October 2026 found no later announcement.

The annual tax on income return is due within 3 months after year end (Law on Taxation Art. 29(1), Art. 30(1) for small taxpayers), 31 March for a calendar year, and is filed online with the GDT. The standard tax year is the calendar year and other year ends can be approved on request, so no fixed year end is set. No official rule was found that moves a weekend or public holiday deadline for the annual return, so the tool keeps the exact date. Practitioners say monthly returns move to the next working day, but that was not confirmed for the annual return. Cambodia has no country-by-country reporting rule. Audited financial statements go to the accounting regulator (ACAR) and are not modelled.